We aren't robots; we have emotions!
When I was around 12 years old, I started listening to pretty much non-stop Dave Ramsey, and a good portion of it went over my head. I found it very interesting through all those hours was how often people tried to modify the plan put forth by Dave Ramsey and inevitably failing in the process.
The most common change people would try to make is 'optimizing' how they paid off their debt. In his baby-steps, Dave Ramsey outlines how you setup your debts from smallest to largest amounts owed. Logically, we would want to pay off the one with the largest interest first, not to have to pay as much overall. However, the reason behind paying the small one-off is psychological; the excitement and power we feel when we get one of saying, 5 debt accounts paid off is higher than seeing 10% paid off.
We try and optimize our life as if we were robots, not humans with emotions. What makes sense on paper may not be the best in real life. As a teenager and still living with my parents, it makes more financial sense not to pay rent, but the emotional growth I'm getting from doing is worth more to me than the money I would have been able to save.
Key takeaways:
1) We try to optimize our life as if we were robots without emotions
2) What makes sense on paper may not be the best course of action in real life
3) We forget to take into account the physiological growth that takes place